Arab Banking B S C : Regulatory Liquidity Disclosures​​ - 30 June 2026

About this update from Arab Banking Corporation B S C

Regulatory Liquidity Disclosures 30 June 2026 Bank ABC (Arab Banking Corporation B.S.C.) Regulatory Liquidity Disclosures Introduction In June 2019, the Central Bank of Bahrain (CBB) issued the regulations to banks operating in Bahrain on the reporting of the Liquidity Coverage Ratio (LCR) as part of the Basel III reforms. The main objective of the Liquidity Coverage Ratio (LCR) is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that they have sufficient level of high-quality liquid assets (HQLA) to cover net outflows and survive a significant stress scenario lasting for a period of up to 30 calendar days. Under the requirements, the Bank is required to maintain an LCR requirement of at least 100% on a daily basis. HQLA eligible securities, fall into three categories: Level 1, Level 2A, and Level 2B liquid assets. Level 1 liquid assets, which are of the highest quality and deemed the most liquid is subject to no or little discount (or haircuts) to their market value and may be largely used without limit in the liquidity buffer. Level 2A and 2B securities are recognised as being relatively stable and reliable sources of liquidity, but not to the same extent as Level 1 assets. LCR rules therefore set a 40 per cent composition cap on the combined amount of Level 2A and Level 2B securities that firms may hold in their total eligible liquidity buffer. Level 2B liquid assets, which are considered less liquid and more volatile than Level 2A liquid assets, are subject to large and varying haircuts and may not exceed 15 per cent of the total eligible HQLA. Bank ABC Group's HQLA comprised primarily "Level 1" securities (86%) with the Central Bank of Bahrain (CBB) and the sovereign and central banks of countries where the Bank has branches and subsidiaries, and also include highly rated corporate debt issuances. Outflows & Inflows Expected outflows are generally calculated as a percentage outflow of on-balance sheet items (e.g. funding received) and off-balance sheet commitments (e.g. credit and liquidity lines) made by firms. The % of outflow varies typically by counterparties per the liquidity rules. Expected inflows are also generally calculated as a percentage inflow on-balance sheet items and include inflows (e.g. from corporate or retail loans) that will be repaid within 30 days. To ensure a minimum level of liquid asset holdings, and to prevent firms from relying solely on anticipated inflows to meet their liquidity coverage ratio, the prescribed amount of inflows that can offset outflows is capped at 75 per cent of total expected outflows. The cash-outflows were driven primarily by unsecured wholesale funding and inter-bank borrowings. The Bank utilises internal Risk Appetite Statement thresholds ("RAS") which act as early warning indicators and safeguards to ensure LCR is maintained above the regulatory minimum requirements at all times. Bank ABC (Arab Banking Corporation B.S.C.) Regulatory Liquidity Disclosures Quantitative Disclosure The Group continued to maintain a strong average LCR position over the reporting period with a prudent surplus to both Board approved risk appetite and regulatory requirements. The Group's average LCR was 268% in the first quarter of 2026 (compared to March 2026: 290%) driven by stable HQLA holdings and lower net cash outflows, reflecting the Group's focus on high-quality liquid assets across our units and aligned with overall growth in the Group's balance sheet and external liquidity environment. Bank ABC also holds adequate liquidity across all its footprint to meet all local prudential LCR requirements, where applicable. Liquidity Coverage Ratio (LCR) for the quarter ended 30th June 2026 (continued) Quantitative Disclosure (continued) All figures in US$ '000 30 June 26 31 March 26 Total unweighted value (average)** Total weighted value (average)** Total unweighted value (average)** Total weighted value (average)** High-quality liquid assets 1 Total HQLA 5,521 7,250 Cash outflows 2 Retail deposits and deposits from small business customers, of which: 3 Stable deposits 4 Less stable deposits 1,869 187 1,854 185 5 Unsecured wholesale funding, of which: 6 Operational deposits (all counterparties) and deposits in networks of cooperative banks - - - - 7 Non-operational deposits (all counterparties) 7,911 4,383 8,864 4,780 8 Unsecured debt - - - - 9 Secured wholesale funding 280 86 10 Additional requirements, of which: 11 Outflows related to derivative exposures and other collateral requirements 21 21 11 11 12 Outflows related to loss of funding on debt products - - - - 13 Credit and liquidity facilities 244 28 226 23 14 Other contractual funding obligations 284 284 317 317 15 Other contingent funding obligations 2,055 103 2,081 104 16 Total Cash Outflows 5,287 5,506 Cash inflows 17 Secured lending (eg. reverse repos) 629 - 863 129 18 Inflows from fully performing exposures 4,331 2,892 3,809 2,522 19 Other cash inflows 335 335 359 359 20 Total Cash Inflows 5,295 3,226 5,031 3,010 Cap on cash inflows 75% 3,965 75% 4,130 Total cash inflows after applying the cap 3,226 3,010 Total adjusted value Total adjusted value 21 Total HQLA 5,521 7,250 22 Total net cash outflows 2,060 2,496 23 Liquidity Coverage Ratio (%) Average 268% 290% ** In accordance with the CBB liquidity module, LCR presented above is a simple average of daily LCR of all working days during Q2 2026 and Q1 2026 respectively. The Consolidated Group LCR ratio as at 30th June 2026 was 267% (31st March 2026: 311%). Bank ABC (Arab Banking Corporation B.S.C.) Regulatory Liquidity Disclosures Introduction In August 2018, the Central Bank of Bahrain (CBB) issued the regulations to banks operating in Bahrain on the reporting of the Net Stable Funding Ratio (NSFR) effective 31 December 2019. The purpose of this disclosure is to provide the information pursuant to CBB's Liquidity Risk Management module LM 12.5 "General Disclosure Requirements". The NSFR is a balance sheet metric which requires institutions to maintain a stable funding profile in relation to the characteristics of their assets and off-balance sheet activities over a one-year horizon. It is the ratio between the amount of available stable funding (ASF) and the amount of required stable funding (RSF). ASF factors are applied to balance sheet liabilities and capital, based on their perceived stability and the amount of stable funding they provide. Likewise, RSF factors are applied to assets and off-balance sheet exposures according to the amount of stable funding they require. As per the CBB liquidity disclosure requirement, the Consolidated NSFR is to be published on a quarterly basis. At the last reporting date, the Group NSFR remained above 100 per cent. The Bank utilises internal Risk Appetite Statement thresholds ("RAS") which act as early warning indicators and safeguards to ensure NSFR is maintained above the regulatory minimum requirements. Quantitative Disclosure At 30 June 2026, the Consolidated Group NSFR was stable at 123% (March 2026 : 127%), well above the regulatory minimum. Available Stable Funding at Group level as of 30 June 2026 was around US$ 23.0 billion (March 2026: US$ 23.2 billion) as against US$ 18.7 billion (March 2026: US$ 18.3 billion) of Required Stable Funding. The drivers of available stable funding include Bank ABC's robust capital base, substantial and reliable wholesale funding from customers and a retail deposits in MENA units. Required stable funding include financing various customers including non-financial corporates, sovereigns, PSE's, financial institutions and retail and small business customers. Bank ABC's HQLA requires minimal funding mainly due to the significant component of Level 1 assets in the portfolio. Bank ABC (Arab Banking Corporation B.S.C.) Regulatory Liquidity Disclosures Quantitative Disclosure (continued) All figures in US$ '000 30 June 26 31 March 26 Unweighted Values (i.e. before applying relevant factors) Unweighted Values (i.e. before applying relevant factors) No specified maturity Less than 6 months Over 6 months and less than one year Over one year Total weighted value No specified maturity Less than 6 months Over 6 months and less than one year Over one year Total weighted value Available Stable Funding (ASF): 2 Regulatory Capital 4,435 4,435 4,265 4,265 3 Other Capital Instruments 722 287 1,009 727 289 1,015 4 Retail deposits and deposits from small business customers: 5 Stable deposits - - - - 6 Less stable deposits 2,363 625 391 3,080 2,351 597 374 3,027 7 Wholesale funding: 8 Operational deposits 9 Other wholesale funding 22,914 6,424 6,925 14,439 22,490 7,400 6,889 14,868 10 Other liabilities: 11 NSFR derivative liabilities - 21 12 All other liabilities not included in the above categories 843 - 739 - 13 Total ASF 22,963 23,176 Required Stable Funding (RSF): 14 Total NSFR high-quality liquid assets (HQLA) 14,794 88 - - 987 13,914 131 - - 907 15 Deposits held at other financial institutions for operational purposes - - - - - - - - - - 16 Performing loans and securities: 17 Performing loans to financial institutions secured by Level 1 HQLA - - - - - - - - - - 18 Performing loans to financial institutions secured by non-level 1 HQLA and unsecured performing loans to financial institutions - 4,561 1,465 1,101 2,486 - 4,864 1,399 876 2,275 19 Performing loans to non- financial corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and PSEs, of which: 7,454 2,577 6,681 10,694 7,238 2,666 6,657 10,611 20 - With a risk weight of less than or equal to 35% as per the CBB Capital Adequacy Ratio guidelines - - - 229 149 - - - 150 97 21 Performing residential mortgages, of which: - - - - - - - - - - 22 With a risk weight of less than or equal to 35% under the CBB Capital Adequacy Ratio Guidelines - - - - - - - - - - 23 Securities that are not in default and do not qualify as HQLA, including exchange-traded equities - 708 198 2,342 2,444 - 226 717 2,129 2,281 24 Other assets: 25 Physical traded commodities, including gold 26 Assets posted as initial margin for derivative contracts and contributions to default funds of CCPs 27 NSFR derivative assets 20 20 - - 28 NSFR derivative liabilities before deduction of variation margin posted - - 4 4 29 All other assets not included in the above categories 1,981 490 8 1,051 1,360 3,213 497 40 1,220 1,537 30 OBS items 11,644 582 11,920 596 31 Total RSF 18,722 18,309 32 NSFR (%) 123% 127% 5

View stock analysis, news, and events for Arab Banking Corporation B S C